Australian Dollar slides on softer inflation, intervention fears bolster Japanese Yen
- AUD/JPY falls to 113.60 after Australian inflation misses expectations.
- Markets scale back expectations for further RBA policy tightening.
- Intervention fears continue to support the Japanese Yen.
AUD/JPY trades around 113.60 on Wednesday at the time of writing, down 0.61% on the day, after weaker-than-expected Australian inflation data triggered broad selling pressure on the Australian Dollar (AUD).
Data released by the Australian Bureau of Statistics showed that the Consumer Price Index (CPI) rose 3.8% YoY in June, down from 4% in May and below the market consensus of 4%. On a monthly basis, the CPI declined by 0.1%, marking a second consecutive monthly decrease. Meanwhile, the Trimmed Mean CPI, the Reserve Bank of Australia's (RBA) preferred measure of underlying inflation, increased by 3.6% YoY, confirming a moderation in underlying price pressures.
The figures reinforced expectations that the RBA could keep interest rates unchanged at its upcoming meetings, with investors scaling back expectations for any additional rate hikes this year. This reassessment of the monetary policy outlook is weighing heavily on the Australian Dollar.
At the same time, the Japanese Yen (JPY) is attracting renewed demand amid growing speculation that Japanese authorities could intervene in the foreign exchange market to support the domestic currency. These expectations are adding further downward pressure on AUD/JPY.
However, the still-wide interest rate differential between Japan and Australia continues to limit the Japanese Yen's upside potential. Investors also remain cautious ahead of the Bank of Japan (BoJ) monetary policy decision scheduled for Friday, which could provide fresh clues about the timing of further policy normalization.
Australian Dollar Price Today
The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.04% | -0.06% | -0.02% | -0.10% | 0.57% | 0.25% | 0.08% | |
| EUR | 0.04% | -0.02% | 0.02% | -0.07% | 0.64% | 0.27% | 0.12% | |
| GBP | 0.06% | 0.02% | 0.07% | -0.03% | 0.66% | 0.31% | 0.14% | |
| JPY | 0.02% | -0.02% | -0.07% | -0.08% | 0.61% | 0.23% | 0.09% | |
| CAD | 0.10% | 0.07% | 0.03% | 0.08% | 0.68% | 0.33% | 0.18% | |
| AUD | -0.57% | -0.64% | -0.66% | -0.61% | -0.68% | -0.35% | -0.50% | |
| NZD | -0.25% | -0.27% | -0.31% | -0.23% | -0.33% | 0.35% | -0.15% | |
| CHF | -0.08% | -0.12% | -0.14% | -0.09% | -0.18% | 0.50% | 0.15% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).
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